In the current market, I think you’ll find that to be vastly more common.
As an example, though, I’d point to the Hyundai Palisade I was leasing at roughly 1.25% ($40k MSRP, $510/mo payment). Failed the 1% test, but it was a better product than every other competitor that I could lease for $500/mo. Hell, parked next to it was a $40k Honda Passport for a bit under 1% at $375/mo. The Palisade was a significantly better deal and value for the money. Both were very aggressive deals when they were leased.
With that said, I’d argue that leasing something (or not) based on the 1% rule is a rash decision. It’s a quick, dirty metric that one uses instead of taking the time to do the real work. If we’re going to use rash decisions to avoid rash decisions, you’re not making up ground.
I can’t think of a car that would be worth paying 2% on unless it was part of a lease-to-own/flip hack. 2% is paying 2/3 of the MSRP of a car in three years.
You’re saying something that we all already agree with you on. The 1% rule of thumb does not determine a good deal. Agreed. Doesn’t mean it’s not useful, with context.
And that’s my point. When there’s context, it ceases to be the 1% rule you’re relying on, but the context.
There are times when 1% of MSRP is spot on. It’s exactly representative of where one should be (or one should run away). Without the context, which can only be determined by actually working out what a good deal is, you never know where that is.
A broken clock is right twice a day. As long as you have the context of what time it actually is, a broken clock is a useful time telling device.
Somebody who leases this is making the decision to pay over half (54%) of MSRP for only three years of the car’s life. We can argue about inflated msrp and our current crazy conditions, but there’s a point where it just makes more sense to buy and 1.5% is in that range.
I was kind of going to go here, but decided I didn’t really want to put forth the effort in the discussion, LOL. I agree with you 100%…At a certain point no matter what metric you use, it’s simply not worth leasing the car.
I don’t think there’s any arguing that, other than there isn’t a cut and dry percentage where that is the case either. Now you’ve got to compare tax liabilities, costs of capital, differences in incentives, risk tolerance, lessor policies on buy outs, etc.
It’s potentially another stopped clock, just in a different time zone.
True enough, it just depends on how many times we want to split the penny😊. In the end, the more effort that is put forth and the more understanding, the better the end result is likely to be. Most people just aren’t going to do that though, and truthfully (selfishly) let’s hope it stays that way😊
What I don’t get is… people often cite the 1% rule as a quick and easy way to evaluate a deal for those who don’t know or care to do the research (which it’s not)… as though the research is rocket science. It’s really not very complicated at all. Am I crazy for thinking that?
Unless there’s a ton of people incapable of comprehending simple concepts, it’s just pure laziness.
Try looking at Jeeps as an example. This may be an extreme example, but if you look through their RV/MF sheet, which of course assumes you could even find it, it boggles the mind the differences between how various trims will lease even among the same model. The average consumer is never going to figure that out.
That is why a site like this one exists. With a bit of crowdsourcing, all of us can cut through some of the cloudiness.
Go talk to someone in their 60s (or even someone in their 20s) about a money factor. Now when you understand a MF, it’s easy, but it can be confusing at first, and that’s one of the easiest parts of a lease. Leases are confusing because dealers are great at making them confusing. So 1% can be a useful alarm that a deal is not good for you. I am not saying it’s good for evaluating whether a lease is “a good deal” or not. Thanks to this site.
I’m talking about people on this site who have the information readily available to them. As for the other 98%, instead of giving them a false sense of security by telling them about 1%, why not help them actually learn how to evaluate a good deal?
Generally speaking I don’t think a 20 year old or a 60 year old is incapable of learning.
